On his NYT blog, Thomas B. Edsall summarizes a National Bureau of Economic Research paper written by Robert J. Gordon, an economist at Northwestern University. Here is the opening salvo in a very interesting blog essay:
The American economy is running on empty. That’s the hypothesis put forward by Robert J. Gordon, an economist at Northwestern University. Let’s assume for a moment that he’s right. The political consequences would be enormous.
In his widely discussed National Bureau of Economic Research paper, “Is U.S. Economic Growth Over?” Gordon predicts a dark future of “epochal decline in growth from the U.S. record of the last 150 years.” The greatest innovations, Gordon argues, are behind us, with little prospect for transformative change along the lines of the three previous industrial revolutions:
IR #1 (steam, railroads) from 1750 to 1830; IR #2 (electricity, internal combustion engine, running water, indoor toilets, communications, entertainment, chemicals, petroleum) from 1870 to 1900; and IR #3 (computers, the web, mobile phones) from 1960 to present.
"Taken in full, Gordon’s controversial N.B.E.R. paper challenges our belief that innovation and invention will continue to drive sustained expansion in the United States."